Understand that homeowners insurance policies which are required when you purchase a home, cover major events like fire and crime. However, a homeowners policy doesn’t cover your hot water heater, furnace, or plumbing equipment. home warranties kick in to cover specific appliances and equipment when they need repair or replacement.
As a long-time homeowner with a list of super reliable service people- I used to ignore home warranty offers- but that changed when the HVAC needed to be replaced. I realized a $100 deductible for a new furnace was far more practical than the $10,000 replacement cost. The Home Warranty is an option you can use or not use depending on your preferences about the repair.
Make sure you do the following before deciding on the type of home warranty coverage you want to purchase:
1. Research. Most real estate companies have a relationship with 1 or 2 reliable warranty companies. Make sure to check BBB and cost comparison before selecting a company. You get what you pay for is a good thing to remember.
2. Read the fine print. Each home warranty contract is different and covers different equipment. Check out exclusions and required maintenance to find the policy that suits you. Moving into a home with a pool or hot tub- many policies will, for an extra cost, cover those items too.
3. Add up the total cost(s). There is no set price for a home warranty. Find out the exact cost of your annual premium and service fees before selecting and signing a warranty contract. Coverage on the better warranties often starts around $800-$900 premium for the year (pools not included). Good news-once you’re insured you can renew the policy on an annual basis (prices will change) until you have the expensive appliances in your home replaced.